Appeal details
Counselvise Citation
[2022] 105 COUNSELVISE.COM (IT) 5783 (ITAT-JABALPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-03-2022
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Assessment Year
2018-2019
Appeal Filed On
30-11-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR (Through web-based video conferencing platform) BEFORE SHRI SANJAY ARORA, HON’BLE ACCOUNTANT MEMBER & SHRI MANOMOHAN DAS, HON'BLE JUDICIAL MEMBER I.T.A. No. 32/JAB/2020 (Asst. Year : 2018-19) I.T.A. No. 33/JAB/2020 (Asst. Year : 2018-19) I.T.A. No. 34/JAB/2020 (Asst. Year : 2018-19) Appellant by : Shri Dhiraj Ghai, FCA Respondent by : Ms. Simran Bhullar, CIT-DR Date of hearing : 22/03/2022 Date of pronouncement : 30/03/2022 Satya Sodhan Ashram, Village Pathariya, Bhopal Road, Sagar (MP) PAN: AAATS 8144 F vs. CIT (Exemptions), Bhopal. (Appellant) (Respondent) Bhagwandas Shobhalal Charitable Trust, Bada Bazar, Sagar (MP) PAN: AAATB 7349 D vs. CIT (Exemptions), Bhopal. (Appellant) (Respondent) Maharshtra Samaj, Dutt Mandir Champa Bag Laxmipura, Sagar (MP) PAN: AABTM 2428 D vs. CIT (Exemptions), Bhopal. (Appellant) (Respondent) ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 2 | P a g e O R D E R Per Bench: This is a set of three Appeals by three different Assessees agitating the rejection of their condonation petitions by the Commissioner of Income Tax (Exemptions), Bhopal (‘CIT(E)’, for short) vide separate orders u/s. 119(2)(b) of the Income Tax Act, 1961 (‘the Act’, hereinafter) of even date, i.e., 11/09/2020. The facts and circumstances of the cases being similar, with the impugned orders being in fact identically worded, the appeals were fixed for hearing and, accordingly, heard together, and are being disposed of per a common order for the sake of convenience. The background facts 2. The background facts, which are common, as explained by Shri Ghai, the ld. counsel for the assessee-appellants, as also borne out by the record, are that the assessees, while their filing tax returns for the relevant year, being assessment year (AY) 2018-19, within the time prescribed therefor u/s. 139(1), furnished the audit report in the prescribed form (Form 10B), as required, electronically, belatedly, with the delay in each case, ranging from 15 to 19 months, exceeding 365 days. This led to the denial of exemption u/s. 11 in view of the breach of the condition of section 12A(1)(b) mandating the furnishing of Form 10B by the due date of filing the return of income u/s.139(1). The assessees petitioned the ld. CIT(E) for condoning the delay in exercise of the power conferred thereon u/s. 119(2)(b) of the Act, which though proved unsuccessful. The Central Board of Direct Taxes (‘CBDT’ or ‘Board’, for short) is u/s. 119(2)(b) vested with the power to, with a view to avoid genuine hardship in a case or class of cases, direct an income-tax authority (other than the Commissioner (Appeals)) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim, and deal with the same on merits in accordance with law. The reason for the delay in each case, explained per the condonation petition to the ld. CIT(E), which ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 3 | P a g e authority stands authorized by the Board u/s. 119(2)(b) (vide Circular No.02/2020, dated 03/01/2020 / copy on record), was a clerical mistake and oversight of the person assigned the said task. The ld. CIT(E), however, declined to exercise the said power in view of para 5 of the Board Circular supra, which reads as under: ‘5. In addition to the above, it has also been decided by the CBDT that where there is delay of up to 365 days in filing Form No.10B for Assessment year 2018- 19 or for any subsequent Assessment Years, the Commissioner of Income-tax are hereby authorised to admit such belated applications of condonation of delay u/s. 119(2) of the IT Act and decide on merits.’ (emphasis, ours) Aggrieved, the assessee/s is in appeal. Arguments 3.1 Before us, Shri Ghai would take us through the decision by the Hon'ble Bombay High Court in Little Angels Education Society v. Union of India & Ors. (in WP Nos.1061 & 1288/2020, dated 25.03.2021 / copy on record), wherein the condonation (of delay) was similarly declined to be considered by the ld. CIT(E), citing absence of power, as the same could be entertained only where the delay in filing Form 10B was up to 365 days. The Hon'ble Court found no error or infirmity in the Commissioner expressing his inability to condone the delay in view of the scope of the power delegated by the Board thereto. The said period (of 365 days) also could not, in its’ view, be held as arbitrary or irrational. So, however, having not been so authorized, the power to condone the delay beyond 365 days continued to vest with the Board. The assessee was accordingly directed by the Hon’ble Court to approach the Board seeking a special order delegating the power for condoning the delay beyond 365 days on merits and in accordance with law to the CIT(E). On such an application being made by the assessee within three weeks of its’ order, the Board shall dispose the same in accordance with law, passing an appropriate order within a period of 4 weeks under intimation to the assessee. Like-wise in Tripura Cricket Association v. Asstt. CIT (in WPA No. 8480 of 2020, dated 26/7/2021 / copy on record) by the Hon’ble Calcutta High Court. We were urged by Sh. Ghai to issue a similar direction/s. ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 4 | P a g e 3.2 Ms. Bhullar, the ld. CIT-DR, would, with reference to a condonation application (in case of Satya Sodhan Ashram, which was taken up before us as the lead case for briefing the facts), citing clerical mistake and oversight as the reasons for the delay, submit that the same were without specifics and vague and, in fact, only an afterthought, so that no interference or indulgence on our part is required. 4. We have heard the parties, and perused the material on record. 4.1 Our first observation in the matter is that the case of either side before us is misconceived. The ld. CIT(E) has not denied the condonation of delay on merits, for the ld. CIT-DR to, before us, defend his order, as she does, on that basis. Rather, the condonation petition in each case being not accompanied by an affidavit averring the relevant facts by the concerned person/s, even its maintainability is questionable. The sole premise of the decision in Little Angels Education Society (supra), which forms the basis of the assessee’s case before us, is that the assessee’s condonation petition, due to it moving the wrong forum (inasmuch as the ld. CIT(E) did not have the requisite power to decide a condonation petition for a delay beyond 365 days on merits), had remained to be considered on merits, and which was not just. We regard this as the ratio decidendi or the sub-stratum of the said decision. The Hon'ble Court, accordingly, directed the assessee to exhaust the said remedy by exercising his right, providing it with a window of opportunity to do so. This in fact could have been, and rather ought to have been, by the petitioner itself. Genuine hardship, which forms the condition precedent for the exercise of the power u/s. 119(2)(b), cannot, to be eligible for being considered and recognized, be subject to any limitation as to time. What, then, one may ask, stopped the assessee/s before us to do so in the first place; it being plain that the delegation of the power by the Board, which is its’ sole prerogative, was only in respect of the defined years, i.e., AY 2018-19 and subsequent years and, further, in cases of delay up to 365 days. Unless, of course, it wished to challenge the said delegation, as was done, unsuccessfully though, in ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 5 | P a g e Little Angels Education Society (supra), and which again could only be before the Hon’ble High Court. Rather, even if there was for some reason – not stated before us, any confusion in this regard, clarity reigned after the said decision, so that, following its’ dictum, the assessee ought to have, citing it, rendered on 25/3/2021, moved the Board directly. Every legal remedy is to be, after all, pressed within a reasonable time. As regards an appeal by the assessee to the Tribunal to redress the said grievance, the same is de hors any provision of law and, thus, misplaced. The Board is an income-tax authority u/s. 116 of the Act, which is vested with the authority as well as duty to administer the Act, and whose directions to the income-tax authorities subordinate to it are binding on them. The Tribunal, on the other hand, is an appellate authority under the Act, which is to adjudicate an appeal by an assessee against an order defined u/s. 253(1) of the Act, as well as by the Revenue against the orders by the first appellate authority (s. 253(2)). An order u/s. 119(2)(b) is not an appealable order, much less before the Tribunal. The same, as per the scheme of the Act, falls under the administrative functions of the Board, to be exercised by it in public interest and for the proper and efficient management of the work. The matter at hand lies within the exclusive domain of the Board, and this Tribunal, whose powers under the Act are defined, falls outside its’ purview. The order in the case of Little Angels Education Society (supra) is by the Hon'ble High Court under its’ writ jurisdiction, which is much wider than that of a purely appellate forum as this Tribunal. We have in any case clarified, even as the said decision, extending a window of opportunity to the petitioner to move the Board, in effect, does, that the same is only in exercise of a vested right conferred by the Act thereupon u/s. 119(2)(b) of the Act, so that it could be exercised independent of any intervention or direction by any Court or Tribunal. A consideration on merits, be it by the Board or CIT(E), cannot, after all, be denied, which would make s. 119(2)(b) otiose, but could only be where an assessee applies for the same. ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 6 | P a g e 4.2 Before parting with this order, we consider it incumbent on us to record our answer to the reply furnished by Sh. Ghai to a query by the Bench during hearing as to the maintainability of the instant appeals before the Tribunal. Shri Ghai, while fairly admitting that the instant appeals do not fall within the purview of s. 253, and were therefore not maintainable under the Act, nevertheless claimed that he was, in view of the precedent available, approaching the Tribunal under Article 14 of Constitution of India (CoI), i.e., equality before law. On further enquiry as to if there was any precedent/s of the Tribunal, an appellate authority under the Act, entertaining or liable to entertain an appeal other than u/s. 253, which only would decide if the instant appeals were maintainable before it, would reply that all he was asking for of the Tribunal was a similar direction (as by the Hon'ble Courts), and not any adjudication on the merits of the case. If it has been in one case, he would argue, it has to be for others as well, and for which the assessee shall, in case of rejection of its’ plea by the Tribunal, approach the Hon'ble jurisdictional High Court. The reply is, with respect, wholly misplaced. The question is not if the assessee shall move the Hon'ble High Court; an aggrieved tax-payer, where so advised, can always take recourse to the legal remedy/s available thereto under law. But as to how an appeal to the Tribunal is such a recourse? Two, whether the approach to the Hon’ble Court could be under its’ appellate jurisdiction, or only under its’ writ jurisdiction, as was the case in Little Angels Education Society (supra) & Tripura Cricket Association (supra)? Only a Constitutional Court could decide with reference to Article 14 of CoI, where the same is, in its’ view, violated. As far as we are concerned, a direction similar to that by the Honb’le High Courts could only be per an order u/s. 254(1), in adjudication of an appeal admissible u/s. 253(1). This Tribunal is thus duty bound to consider if an appeal thereto is maintainable before it, and our query was directed toward that end. This aspect, which came up during the course of hearing, ought to have been brought to our notice suo motu, at the outset, which was, we are afraid to say, unfortunately not, and by either party. As regards the plea of not seeking an order by the ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 7 | P a g e Tribunal on ‘merits’, but only a similar direction, how could, firstly, there be an order on merits when the impugned order itself concerns and is limited only to the condonation of delay? Besides, the said direction, where so, could again only be u/s. 254(1), in adjudication of an appeal u/s. 253(1). We have, both during hearing as well as herein, observed that for us it is no more than a case of the assessee not approaching the competent authority inasmuch as the power delegated by the Board to CIT(E) was only a part of the administrative power vested by law therein, so that the latter was admittedly incompetent to decide the condonation petition before him. This is precisely what again emanates from the cited decisions by the Hon’ble High Courts, so that even where misinformed or misguided earlier, the assessee/s, post the said decision/s, ought to have moved the proper forum, making out a case for the exercise of power u/s. 119(2)(b) by the Board in its’ case, either directly or through the CIT(E). The facts and circumstances leading to the delay, and which form the basis of genuine hardship, could well be different for different assessees. As such, whether it would translate into a genuine hardship for a class of the assessees, we cannot tell. Being a matter on which we are not called upon to issue a finding, which even the Hon'ble High Courts have abstained from, was not examined by us, much less in detail. In our view, this is a matter to be examined by the authority exercising the power u/s. 119(2)(b). Further, if by precedent/s Shri Ghai meant an order/s by the Tribunal – not shown, would that mean that such an order/s, issuing a similar direction, would translate into a precedent, binding us? That is, would make it an order u/Art. 14 of the CoI, or an assessee’s appeal maintainable u/s. 253(1)? On the contrary, in our opinion, it would be an order by the Tribunal in excess of jurisdiction, liable to be recalled u/s. 254(2). Equity or hardship, as explained by the Apex Court in Prashanti Medical Services & Research Foundation v. UoI [2019] 416 ITR 485 (SC), cannot be factors to be considered in deciding the validity of the statutory provisions. 4.3 We may though also clarify that there is merit in the plea that if the Board has, in Little Angels Education Society (supra), or in any other case for that matter, ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 8 | P a g e in exercise of its’ power u/s. 119(2)(b), extended the power of the CIT(E) to admit and consider an application for the condonation of delay in the submission of Form 10B for AY 2018-19 (and/or subsequent years) beyond 365 days on merits, or deemed it proper to consider it itself, i.e., in view of the said decision/s, the ld. CIT(E) or, as the case may be, the Board, ought to, on being moved by an assessee, consider the same on merits and in accordance with law. We are conscious, when we say so, that we have already held the instant appeals as not maintainable before the Tribunal, so that the question of, or the occasion to, issue any opinion in the matter does not arise. The same, however, has been stated as the said plea is unexceptional, nay, axiomatic, with a view to clarify that nothing stated by us in this order may be construed as contrary thereto, and is rather only consistent therewith. In fact, if only the assessee/s had taken pains to ascertain the order passed by the Board consequent to the cited decisions, it could have approached the competent authority directly, obtaining a decision on merits. 4.4 We decide accordingly. 5. In the result, all the appeals are dismissed as not maintainable. Order pronounced in the open court on March 30, 2022 Sd/- sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 30/03/2022 vr/- ITA Nos. 32-34/JAB/2020 (AY 2018-19) Satya Sodhan Ashram & Ors v. CIT(E) 9 | P a g e Copy forwa rded to: 1. The Appellant: (i) Satya Sodhan Ashram, Village Pathariya, Bhopal Road, Sagar (MP) (ii) Bhagwandas Shobhalal CharitableTrust, Bada Bazar, Sagar (MP) (iii) Maharshtra Samaj, Dutt Mandir Champa Bag Laxmipura, Sagar (MP) 2. The Respondent: CIT (Exemptions), Bhopal (MP) 3. The Principal CI T, Jabalpur 4. The CI T-DR, I TAT, Jabalpur 5. Guard File By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur.
Mehul